The aim of the paper is to investigate the
relationship between official employment,
official unemployment and unofficial
employment in Romania for the period 2000-
2014 using LFS survey data.
Using the labour approach, the number of those
employed who work in unofficial economy can
be revealed, but the number of those employed
in both unofficial and official economy remains
unknown. Very important to mention is the fact
that the findings of the paper need to regarded
with caution due to the limitations of the
method (those described in an earlier section of
the present paper).
One important finding, revealed by the
empirical results, is the existence of a negative
relationship between activity rates and the
estimated value of unofficial employment, as
expected. As stated before, correlation
coefficients for the period 2000-2014 reveal the
presence of a negative relationship between
official employment and unofficial
employment, respectively official
unemployment and unofficial employment. This
finding needs to be regarded by the
policymakers with the deserved attention, due to
the fact that it suggests that the unofficial
economy is the alternative to the official
economy when the official environment
becomes too unfriendly. Moreover it implies
that inadequate economic policies will hide
parts of the economy from the tax collection
system. On the other hand, appropriate policies
should be designed in order to bring the
unofficial economy into the light and, therefore,
to strengthen the official economy. In these
circumstances we suggest that the policy
makers should focus first of all in bringing the
unofficial economy and the unofficial
employment into the light (and into the tax
collection system) and, afterwards, on the
creation of new jobs.
We also state clear that the level of the
Romanian unofficial employment is presumably
underestimated due to the lack of statistical data
and to the method limitations. As further
research direction, we propose the usage of this
method at sector level, in order to identify the
main weak points of the Romanian economy.